1. Does Vietnam have a sanctions regime in place?
As a member of the UN, Vietnam is obligated to implement UN sanctions. However, Vietnam has only fairly recently taken steps to implement all UNSC Resolutions into domestic legislation.
The Law No. 28/2013/QH13 on Anti-Terrorism (“Anti-Terrorism Law”) was adopted by the National Assembly on 12 June 2013. This prohibits all acts of terrorism and terrorist financing as well as acts of concealing, harboring or failing to denounce acts of terrorism and terrorism financing. The Anti-Terrorism Law also requires that money and property related to terrorism and terrorism financing must be suspended from circulation, blockaded, sealed off, temporarily seized, and dealt with in accordance with law.
2. Does Vietnam implement UN sanctions?
Yes. International Treaties and conventions are implemented in Vietnam in accordance with articles 76-80 of the Law No. 108/2016/QH13 on International Treaties 2016 (“Law on International Treaties”). When Vietnam becomes a party to an International Treaty it is the responsibility of a recommending agency to submit to the Prime Minister of Government (“Prime Minister”) a plan for the implementation of the Treaty. The Prime Minister then decides whether to approve the implementation.
3. Does Vietnam implement an autonomous sanctions regime?
Vietnam has legislation in place that seeks to address the risk of terrorism and terrorist financing. According to the Anti-Terrorism Law, Law No. 07/2012/QH13 on Anti-Money Laundering 2012 (“Anti-Money Laundering Law”) and their guiding documents, financial institutions have obligations to apply counter-terrorism financing measures prescribed by law and to monitor and report timely any suspicion of terrorist financing to the antiterrorism forces of the Ministry of Public Security (“MoPS”) and concurrently to the Anti-Money Laundering Department of the State Bank of Vietnam (“SBV”) (such reports shall be made on a daily basis if presented under electronic data file), and the MoPS forces have the power to apply temporary measures in order to combat money laundering and terrorist financing.
4. What is the nature of the sanctions regime in Vietnam?
In accordance with the Anti-Terrorism Law and Decree No. 122/2013/ND-CP dated 11 October 2013 (“Decree 122”), all financial institutions and non-financial individuals/entities must report any suspicion of terrorist financing to the MoPS.
Decree 122; Decree No. 116/2013/ND-CP dated 4 October 2013, detailing the implementation of the Anti-Money Laundering Law, as amended by Decree No.87/2019/ND-CP dated 14 November 2019 (“Decree 116”); and Circulars guiding Decree 116 list a number of grounds which relevant institutions in Vietnam can take into account when determining whether a transaction relates to terrorist financing. One of the grounds to be taken into account is whether the transaction being carried out relates to organizations or individuals listed in the relevant resolutions of the UNSC issued under Chapter VII of the UN Charter.
Organizations are also required to have in place measures to identify and monitor customer information and activity to ensure that they identify and report to the MoPS any individuals/entities who are subject to sanctions or subject to the MoPS ‘black list’.
The nature of the sanctions imposed in Vietnam include asset freezes, restrictions on the direct or indirect provision of financial or economic resources as well as other specified services to designated individuals/entities as well as trade restrictions.
Moreover, subject to the nature and seriousness of the act of violation committed, according to both old Criminal Code 1999, as amended in 2009, and current Criminal Code 2015, individuals involved in terrorist financing shall be sentenced to between 5 and 10 years of imprisonment. Offenders may also be subject to probation, residence ban for between 1 and 5 years, or confiscation of part or the whole of their property.
5. Does Vietnam maintain a list of sanctioned individuals and entities?
Vietnam typically relies upon the lists of designated individuals and entities specified by the UN. Article 3.1 of Decree 122 confirms that organizations and individuals involved in terrorism and terrorist financing, i.e. to be sanctioned, are those falling within the list of organizations and individuals involved in terrorism and terrorism financing particularly specified in the resolutions of the UNSC.
When it is identified that organizations and individuals are involved in terrorism or terrorism financing, in accordance with UNSC Resolutions but are not yet included in the list designated by the UNSC, the MoPS in coordination with other relevant Ministries and agencies creates a blacklist and reports thereon to the Prime Minister. The Prime Minister will determine whether such details should be submitted to the UN for consideration. In addition, where it is identified that individuals/organizations who are designated by the UN may not meet the criteria for designation, the MoPS, in co-ordination with other relevant Ministries will report to the Prime Minister who will decide whether such information should be submitted to the UN.
6. Are there any other lists related to sanctions?
See comments at question 5 in respect to the MoPS blacklist.
7. Does Vietnam have a licensing or authorization system in place?
Article 7 of Decree 122 states that the Minister of MoPS has jurisdiction for making decisions in respect of:
- the confiscation of assets for state funds or destruction of money and property related to terrorism or terrorism financing, and
- the return of money and property related to terrorism or terrorism financing in cases where such money and property are owned and managed by other agencies, organizations and individuals and illegally possessed and used in terrorist activities or terrorism financing.
In addition, specified directors of departments falling within the MoPS have the right to issue or cancel a decision in respect of the freezing of assets related to terrorism or terrorism financing in certain cases as stipulated.
It is also possible for individuals subject to sanctions to seek authorization to use frozen funds to pay for legal services, services of keeping and preserving money and property sealed off or blockaded, or costs of accommodation, food, medical care and other essential expenses. The authorization and use of essential expenses mentioned above must comply with Vietnamese laws and international treaties to which Vietnam is a member.
8. What are the consequences for a breach of sanctions in Vietnam?
Decree No. 88/2019/ND-CP dated 14 November 2019 (“Decree 88”) sets out penalties for administrative violations of currency and banking regulations. In which Articles 39 to 46 of Decree 88 state that violations against regulations on anti-money laundering and anti-terrorism financing will be subject to monetary fines and remedial measures.
Specifically, the following penalties can be imposed:
- a fine between VND 20,000,000 (around USD1,000) and VND 30,000,000 (around USD1,500) may be applied to the failure to update customer information as prescribed in Articles 8 and 10 of the Anti-Money Laundering Law and the Anti-Terrorism Law (Article 39.1),
- a fine between VND 30,000,000 (around USD1,500) and VND 40,000,000 (around USD2,000) may be applied to the failure of ensuring the confidentiality of information and reports as prescribed in Article 29 of the Anti-Money Laundering Law and the Anti-Terrorism Law (Article 39.2),
- a fine between VND 30,000,000 (around USD1,500) and VND 50,000,000 (around USD2,500) may be applied to the failure of adopting customer identification methods or enhanced due diligence approach prescribed in Articles 12.2, 12.3 and 12.4 of the Anti-Money Laundering Law and Article 34 of the Anti-Terrorism Law (Article 41.1),
- a fine between VND 50,000,000 (around USD2,500) and VND 100,000,000 (around USD5,000) may be applied to the failure of classifying customers under categories of money laundering and terrorist financing risk as prescribed by law (Article 41.2),
- a fine between VND 20,000,000 (around USD1,000) and VND 30,000,000 (around USD1,500) may be applied to the failure of submitting reports on schedule as prescribed in the anti-money laundering and anti-terrorism financing laws (Article 44.1),
- a fine between VND 80,000,000 (around USD 4,000) and VND 100,000,000 (around USD 5,000) shall be applied to the failure of reporting money laundering acts for terrorism financing as required in Article 30 of the Anti-Money Laundering Law, the failure of reporting on customers or their transactions suspected of being related to terrorism financing, or the failure of reporting on customers on the blacklist as prescribed in the Anti-Terrorism Law (Article 44.3),
- a fine between VND 150,000,000 (around USD 7,500) and VND 200,000,000 (around USD 10,000) shall be applied to the failure of placing special supervision over: irregularly high-valued transactions (i.e. transactions which are clearly not proportional with income or not in conformity with the level of regular transaction value of clients with the reporting subjects); complicated transactions (i.e. transactions which are performed through methods not conformable with the nature of transactions such as: transactions performed through many intermediate parties, many accounts in an unnecessary way; transactions performed among various accounts of a same account holder, at various geographical regions; or any transaction which the reporting subjects assume is abnormal and need to have strict supervision); or transactions involving organizations and/or individuals located in the countries or territories named in the anti-money-laundering or warning lists informed by the Financial Action Task Force (“FATF”) for the anti-money laundering purpose or the alert list prescribed in Article 16 of the Anti-Money Laundering Law; or the failure to regularly examine and clarify transactions which are suspected of being related to terrorism financing (Article 44.4),
- a fine between VND 40,000,000 (around USD2,000) and VND 80,000,000 (around USD4,000) may be applied to the failure of immediately reporting on the suspension of circulation or blockade of all money and assets related to the terrorism financing (Article 45.1.c),
- a fine between VND 100,000,000 (around USD5,000) and VND 150,000,000 (around USD7,500) may be applied to the failure of immediately suspending the circulation or blockade all money and assets related to the terrorism financing (Article 45.2.c),
- a fine between VND 30,000,000 (around USD1,500) and VND 60,000,000 (around USD3,000) may be applied to the act of obstructing the provision of information serving the performance of anti-money laundering and combating the financing of terrorism tasks (Article 46.1); and
- a fine between VND 200,000,000 (around USD10,000) and VND 250,000,000 (around USD12,500) and remedial measures (including: (i) Proposed suspension of violating entities and/or individuals responsible for the violation from holding the management or supervision position for 01 – 03 months, proposed dismissal or prohibition from holding the management or supervision position at a credit institution or foreign bank branch; and (ii) Proposed dismissal and implementation of other appropriate measures against violating entities within the competence of a credit institution or foreign bank branch) may be applied to the failure of denouncing terrorism financing activities (Articles 46.3.c and 46.4).
The fines incurred by organizations will be twice.
9. Who are the relevant regulators in Vietnam and what are their contact details?
There are a variety of State agencies responsible for implementing legislation related to UN Treaties. These include:
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